BlackBerry vows to make even fewer phones

New strategy means hardware business is just clinging on, at best

It isn’t just Microsoft that’s going on a drastic phone diet. BlackBerry’s CEO John Chen today indicated that the Canadian enterprise vendor would cut its device portfolio from the four devices previously promised for 2015 to “two or one” a year.

“We are reducing jobs, but it is not so much as reducing; we are shifting it, so we are taking a lot of the hardware, hence that traditionally we make four phones a year or design, made, manufactured, whatever. We are not going to do that anymore. We are going to at least cut it down a lot; maybe two, maybe one, but not so many,” Chen told Fox Business.

The “two new phones every year” model works well for Apple, of course, but BlackBerry isn’t Apple; and in its most recent quarter BlackBerry shipped just 1.1m devices through to end customers, an annual run rate of under five million. Chen in the past said 10m per annum looked to be the break even benchmark that would justify BlackBerry’s running hardware business. Two or one means hanging on by BlackBerry’s fingernails.

Chen was speaking at BlackBerry’s annual Security Summit in New York this week, where amongst the many interesting new enterprise offerings, it’s easy to forget that BlackBerry still has a device business at all. Most recently, reports have pegged BlackBerry offering Android-flavoured devices, or at least an Android image, under the control of a hypervisor. Executives declined to elaborate on what they called “rumours” – but it’s evident the device business is so low down the rankings it may as well be watching the game from a TV outside the stadium.

Nevertheless, there are reasons for staying in the devices game, as specialist BlackBerry’s strategy chief Jeff Holleran told us. Some customers, such as the defence industry, or Angela Merkel, simply insist on it. You get chip level security, with various operations such as boot up being managed by ARM’s trusted mode. Bog standard Android or iOS don’t do this.

The network allows BlackBerry to sells a highly managed device, where the network provides the 2FA. So a lot of things become much easier with a trusted secure device. Therefore it makes sense to sell some kind of secure endpoint; if it didn’t, the customer would go off and try and find one. And probably spend more, and still not find one that’s as secure.

Quite what the two (or even one) a year might look like is a reasonable conjecture. One full touch device and one with a keyboard, perhaps? I gathered here at the Summit that we won’t have to wait long to find out. ®